Silver prices rose in both local and global markets during Wednesday’s trading, with the ounce recording its highest level ever, driven by rising industrial and investment demand amid persistent supply constraints, according to a report by the Safe Haven Center.
The report stated that silver prices in the local market increased by around EGP 5, with silver 800 quoted at EGP 85 per gram, silver 925 at EGP 98 per gram, and silver 999 at approximately EGP 106 per gram, while the silver pound remained stable at EGP 784.
Globally, silver prices climbed by about $5 per ounce to reach $67, marking an all-time high for the white metal.
The report noted that silver has reached unprecedented levels in global commodity markets, supported by a rare combination of prolonged supply constraints and strong industrial and investment demand since the beginning of the year.
Silver extended its gains to more than 131%, significantly outperforming gold, which has risen by about 60% in one of its most profitable years since 1979.
Limited Supply Fuels the Rally
The sharp rise in silver prices is largely attributed to ongoing supply shortages alongside growing industrial and investment demand. Global surveys indicate that 2025 is expected to mark the fifth consecutive year of a silver supply deficit, with mined production declining by around 3% year-on-year. Contributing factors include falling ore grades and a lack of new mining projects, which continue to limit the sector’s ability to boost output, according to the World Bureau of Metal Statistics.
In an earlier report this year, the Silver Institute also forecast that silver supply would grow by just 2% year-on-year, leaving the deficit at around 20%.
On the demand side, silver continues to play a critical role in industrial applications, particularly in renewable energy and electronics. Consumption linked to decarbonization and digital transformation has increased, supporting silver prices relative to other commodities.
Silver’s dual role as an industrial material and a financial asset has broadened its appeal, especially as inflows into silver-backed exchange-traded funds (ETFs) accelerate. Expectations of global monetary easing—including anticipated U.S. interest rate cuts by the Federal Reserve in 2026—have reduced the opportunity cost of holding non-yielding assets such as precious metals, renewing institutional interest in silver as a diversification tool and an inflation hedge.
Broader Precious Metals Momentum
Other precious metals also saw bullish momentum on Wednesday. Gold prices rose toward their previous record highs, hovering around $4,322 per ounce, after U.S. November unemployment data fueled speculation that the Federal Reserve may adopt a more accommodative monetary policy in the future.
Volatility Keeps Silver’s Path Uncertain
Despite the strong rally, silver remains one of the most volatile precious metals, given its sensitivity to a wide range of industrial and investment factors. According to a report by Dutch bank ING, silver has historically tended to move sharply in both directions due to its relatively small market size.
Analysts note that silver’s outlook remains closely tied to global manufacturing activity, particularly in sectors such as electronics and solar energy. ING warned that “the main risk to the outlook comes from the industrial side,” adding that a sharper-than-expected global slowdown could dampen silver’s momentum.
The bank also said that sustained high prices over an extended period could eventually weigh on demand, even as it expects prices to remain supported by strong industrial demand, limited supply growth, and a more favorable macroeconomic environment.
Meanwhile, global inventory data showed that London exchange silver stocks have risen by about 1,447 tonnes since the start of the year, while COMEX inventories increased by around 4,311 tonnes. The bulk of global stocks remains concentrated in London. Data indicate that roughly 78% of silver holdings in London Bullion Market Association (LBMA) vaults are represented by ETFs, compared with 65% in November 2024.
Silver-backed ETFs recorded strong inflows, with holdings rising by about 487 tonnes in November and by more than 475 tonnes since the beginning of December, reflecting substantial institutional participation in the market. Despite the surge in investment demand, the increase in available stocks in London points to a gradual improvement in overall market conditions.
Standard Chartered expects silver to have further upside potential, despite the likelihood of short-term volatility as the market searches for a new equilibrium following the sharp recent gains.
The Silver Institute also forecasts that the supply deficit will persist for a fifth consecutive year in 2025, underpinning upward price pressures on a more sustainable basis. Expectations of U.S. interest rate cuts, a relatively weaker dollar, and continued investor inflows into silver-backed investment products have further strengthened silver’s appeal as a hedge against risk.
Despite the exceptional performance, some reports suggest that industrial demand could ease if global economic growth slows. However, investment demand for silver is expected to remain strong enough to support elevated price levels and prevent a sharp downturn.
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